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Why due diligence matters when making corporate donations to charity


As part of their corporate social responsibility mandates, many small to medium-sized organizations make a point of donating significant gifts to charities and non-profits every year. Whether in the form of time or funding, their philanthropy is a lifeline for Canada’s charitable sector.   

Organizations use their support of various charities as an effective branding tool and a means to deepen connections to their respective communities. Great causes receive much-needed funding, companies earn recognition for giving back, and both the giving and receiving sides benefit.

Of course, corporate philanthropy is most effective when it relates to your core business model—an accounting firm providing annual tax return services to a charity, for example. Or, a pharmaceutical company giving nutritional supplements or medicine to the developing world. 

Being strategic and aligning your company’s activities in the for- and not-for-profit worlds simply makes good sense. It also helps employees see the impact of that great work, which can deliver improved workplace engagement, increase productivity, and help to attract and retain high-value personnel. Moving your organization from cheque writing as a donor, to well-curated philanthropy, takes away the transactional aspect of giving and delivers a raft of benefits. 

But keep another, equally relevant, point in mind when making charitable donations either as an entrepreneur or through your corporation: properly vetting charities to ensure their values align with those of your organization. 

This may seem obvious, but it’s a step that’s often overlooked by well-meaning business owners aiming to make a difference. Many donate first and ask questions later without doing their homework. But much like partnering with a supplier to deliver products or services, it always pays to understand the group you’re working with, or supporting.  

While you may think you know what the charity stands for, do you understand its full mission statement, core values and the challenges it hopes to address? Let’s say you operate a business that supplies equipment to oil and gas companies and you wanted to give back by donating to an environmental charity. If the latter’s objective was to eradicate the use of fossil fuels, this would be an obvious misalignment of values, not to mention a potential embarrassment to your brand. 

Take a look at the charity’s board and management, then ask what their plan is to achieve the organization’s long-term strategic objectives. How willing are they to work with your team to steer your gift in a preferred direction, if requested? Striking up a true, mutually beneficial partnership with a charity will create a far greater community impact than a simple one-off donation. You’ll gain a deeper understanding of the program you’re funding and how to measure its success, and will be more likely to make a longer-term funding commitment.  In that scenario, both sides benefit, while you can also leverage giving as an important tool to engage your employees in meaningful philanthropy—and, more generally, in the workplace. 

This process can take time, but it’s well worth the effort. When for-profit organizations can help non-profits achieve their benevolent goals and put a smile on employees’ faces along the way, everybody wins.

Denise Castonguay is the Executive Director and CEO of Canada Gives, a federally registered not-for-profit organization committed to helping philanthropists build and grow high-impact foundations.

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